After the cancellation of the CF-105 Arrow program in February 1959, George Pearkes, the Canadian Minister of National Defence officially maintained that the existing Avro CF-100 interceptors and the Bomarcmissiles that had been ordered in September 1958 would be adequate for Canada’s air defense needs. Unofficially, it was recognized that there was still a bomber threat, and discussions had been underway since before the formal conclusion of the Avro Arrow program concerning the RCAF acquiring an "off-the-shelf" interceptor from the United States.

The USAF indicated that it was prepared to make 56 F-101B interceptors and 10 F-101F trainers available (by employing Convair F-102 Delta Daggers in less demanding NORAD sectors) for Canadian purchase. The deal was delayed for over a year by negotiations over acquisition costs and offsets, as well as debate within the Diefenbaker government about Canada adopting nuclear weapons systems, which had been agreed to, in principle, in 1958. The financial arrangements were sorted out by Canada taking over the staffing and funding of 11 Pinetree Lineradar stations within Canada that had formerly been operated and funded by the USAF. A detailed agreement signed in June 1961 covered the transfer of the aircraft, meant to equip five front-line squadrons (replacing nine CF-100 squadrons) and an Operational Training Unit (OTU).

The issue of nuclear weapons in Canada had not been resolved in June 1961, thus the CF-101s was armed only with their secondary AIM-4D Falcon missiles. In April 1963, the issue led to the collapse of the Diefenbaker government. The succeeding Pearson government signed an agreement with the United States concerning nuclear arms for Canada on 16 August 1963. The agreement did not actually state that Canada was acquiring nuclear weapons; the Canadian government usually refused to confirm or deny that there were any nuclear arms in Canada. The agreement specifically stated that the AIR-2A Genie rockets were the property of the United States and would only be released to Canada for actual use with the joint agreement of Canada and the United States through NORAD. The stringent training requirements meant that it took until June 1965 for the Genies to become operational in Canada. The Genies were kept in the custody of the USAF, with detachments of the 425th Munitions Support Squadron located at each of the Canadian bases.

Each Voodoo base was laid out to allow aircraft to be kept at immediate readiness at all times. A Quick Reaction Alert (QRA) facility was positioned at the end of the main runway to allow alert aircraft to launch as quickly as possible. Two aircraft and their crews were always on “five minute” alert — the aircraft were to be in the air, en route to intercept unknown aircraft, within five minutes of receiving the order. In one instance, 416 Squadron was able to get two alert aircraft in the air only 57 seconds after receiving the alert. Voodoos were dispatched with some regularity to intercept unidentified NORAD radar contacts, usually airliners flying off course, although 416 and 425 occasionally intercepted SovietTu-95 Bear bombers flying along the Atlantic coast to Cuba. Fortunately, no situation ever arose in which a CF-101 pilot fired his weapons in anger.

Between 1970 and 1972, Canada traded the 56 survivors of the original CF-101 fleet back to the USAF for 66 replacements under Operation Peace Wings. The "new" aircraft were actually manufactured earlier than the original fleet, but the airframes had a lower number of hours with updates that had not been performed on the Canadian Voodoo fleet (including the addition of an IR tracking system). Bristol Aerospace of Winnipeg, Manitoba, performed modifications on the incoming fleet, which involved transferring some specifically Canadian items of equipment, including engines, from the “old” aircraft to the “new.” Many of the “old” Canadian Voodoos were scrapped when they returned to the U.S., but 22 were converted to RF-101B photo-reconnaissance versions and flew with the NevadaAir National Guard until 1975.

CF-101B (101057) from 409 Squadron in an airshow flypast on 13 June 1982 at CFB Edmonton

During its service, the aircraft was a popular performer at airshows and other events in Canada and the United States; displays ranged from a single aircraft's appearance to an entire squadron. In 1967, a CF-101 flew (in company with a CF-104 and The Red KnightT-33) in the Golden Centennaires display team to mark the nation's Centennial. In 1984, each squadron painted a special "show" aircraft to commemorate the type's impending retirement. 409 Squadron produced "Hawk One Canada," 416 Squadron produced "Lynx One Canada," and 425 Squadron produced "Lark One Canada/Alouette Un Canada."

Through the 1970s, the increasing obsolescence of the CF-101 and the CF-104 led to the New Fighter Aircraft program. Launched in 1977, the program sought a replacement for the CF-5, CF-104 Starfighter, and CF-101 Voodoo. The Grumman F-14 Tomcat, F-15 Eagle, F-16 Falcon, McDonnell Douglas F/A-18 Hornet, Panavia Tornado, Dassault Mirage F1, and the Mirage 2000 were evaluated as potential replacements. Cost considerations reduced the choice to the F-16 and F-18; the F-18 was ultimately selected in April 1980. The Voodoo OTU converted to CF-18 Hornets in June 1982; 409 and 425 Squadrons also stood down in June 1984. 416 Squadron remained in service into December 1984 as the world’s last front-line Voodoo squadron. With the stand down, the last nuclear weapons in Canada were returned to the United States.

Two Voodoos remained in service after the stand-down: the unique EF-101B electronic jamming aircraft (also known as the "Electric Voodoo") and a single CF-101F trainer, in service with 414 Squadron at North Bay, Ontario. The EF-101B was a conversion of a regular F-101B, incorporating the electronic jamming suite from an EB-57E Canberra. Only one aircraft was converted before the program was cancelled and this sole example was leased to Canada. The last two Voodoos continued to fly until April 1987, when they were finally retired. The EF-101B was returned to the United States on 7 April 1987, while CF-101F 101006 made the world's last Voodoo flight on 19 April 1987, as it made a delivery flight to CFB Chatham for eventual display at CFB Cornwallis, Nova Scotia.